According to the Financial Times, Reynolds American (NYSE: RAI) is exploring buying some or all of Lorillard (NYSE: LO), a cigarette company which specializes in menthol cigarettes. The price could be a staggering $20 billion.

Lorillard’s stock spiked higher when the news came out, but has drifted down since. It's trading around $52.50, still up around $3 compared to its close before the news broke.

Reynolds, known for its Camel cigarettes and other brands, controlled 25 percent of the North American market in 2012, the FT reported, while Lorillard controlled another 11.7 percent. If Reynolds bought all of Lorillard, the combined company would control over a third of the market, perhaps attracting the attention of antitrust regulators. If so, it could scuttle the deal. A couple of years ago AT&T (NYSE: T) abandoned a contemplated merger between itself and T-Mobile (NYSE: PCS), another leading telecommunications provider, after regulators filed suit to block it.

Another reason the deal could take a long time to close is that Reynolds can’t pull the trigger itself. British American Tobacco would need to approve the acquisition, as it owns nearly 42 percent of Reynolds American.

Lorillard is expected to do an aggregate $5.3 billion in sales this year.